A Big Crack in the Bond Story

The technical picture suggests that the much-anticipated breakdown in the bond market has begun.

It is no secret that the Treasury bond market has defied common wisdom by rallying sharply in the face of seemingly bearish fundamentals. Even though markets can move in unexpected ways longer than investors can fight them, eventually they do return to equilibrium.

Right now, the Treasury market is on the edge of doing just that. If it breaks down, that would mean interest rates start to move higher.